Wednesday, August 29, 2012

Missed it by how much?

Another stoush has broken out between State and Federal Governments over environmental approvals for the highly promised dredging of Trinity Inlet to allow larger cruise ships into Cairns. What can one say except to note that the $40 million promised in the election has blown out to a cost of $85 million to $110 million before even any kind of economic or environmental report has been released?

It is noted that being wrong by more than 100% on cost is apparently no justification to require further analysis with the State committed to the project? The report commissioned by the previous Government has been acknowledged but remains unreleased!

As Maxwell Smart would say .......
Many previous links on this and there could be a good opening for another rant on multipliers if I can find the postings on the suggested economic benefits of this v the magnificent multipliers also suggested for just $8 million for the entire state in airline incentives!

Cairns Post report:  http://www.cairns.com.au/article/2012/08/30/232939_local-news.html
Previous post at Cairnsblog is also noted:  http://www.cairnsblog.net/2012/02/lnps-dredging-trinity-inlet-is-reckless.html

2 comments:

  1. This is interesting. I look forward to seeing how the story develops. Re. multipliers, they can be relevant for regional economies with significant unemployed resources, which sounds like Cairns at the moment. But an investment of this magnitude would need to be assessed over a twenty year time horizon, and it wouldn't make sense to assume high unemployment persists in Cairns over so long a period. Eventually people would move out or stop coming to Cairns if there are no jobs.

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  2. Thanks Gene, and your point on unemployed resources is noted. I think it was Gruen from Treasury who responded to a parly committee question that there was no such industry multiplier if an economy is approaching full employment.

    How that plays out in a regional economy within a currency zone is also interesting and seems to me to have been neglected given that labour mobility is an essential component of an efficient currency zone? Which is what you have said with reference to Cairns over the long term should conditions persist?

    The reference to the multipliers is also because I recall the numbers and spin being thrown around at the time of election and thinking it would have been impossible to justify dredging v flight subsidy on a comparative basis if the numbers were accepted!

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